Bucharest Stock Exchange kicks off 2019 with a nearly 6 percent decline while the energy and utilities index is the only one showing growth

2/15/2019

The Romanian capital market started 2019 with a drop of nearly 6 percent both for the BET index and the BET-TR index, which also includes the dividends. Only the BET-NG index, which includes the companies in the energy field and utilities, went up last month by 2.4 percent.

When compared to Europe, the Romanian market posted in January the second biggest decline among the main indices of the stock exchanges from the European Union.

All the indices of the Bucharest Stock Exchange (BVB) started 2019 with a decline, except the BET-NG index, which includes the companies in the energy field and utilities, and went up by 2.44 percent. Therefore, by the end of January, the main market index BET, which includes the most traded 15 companies except for the Financial Investment Companies, went down by 5.8 percent. A similar decline saw the BET-TR index, which also includes the dividends offered by the companies from the BET index. Among the main indices of the stock exchanges from the European Union, only the capital market from Cyprus posted lower results, of 7.5 percent respectively.

As far as the Romanian market is concerned, The downward trend was triggered mid-December last year, following the public information regarding additional taxation in banking, energy and telecom sectors, as well as changes in the Pillar II pension system. In one trading session, the BET index plummeted by 11.21 percent, wiping out in a single day the entire increase the capital market had seen in the entire year.

For a better understanding of capital markets, BVB has publically expressed openness and availability to dialogue and communication and has repeatedly warned that investors need legislative predictability in order to fairly evaluate the market opportunities the stock market has to offer, as it represents the environment where Romanian companies worth about 10 percent of the country’s Gross Domestic Product operate.

Facing higher than usual volatility, the average daily trading value for equities exceeded EUR 10 million in January, which represented a nearly 3 percent growth as compared to January 2018. A similar growth rate was reported for the total trading value for equities when also compared to the first month of last year. The investors operating on the BVB main market traded shares worth EUR 210 million last month alone.

The market capitalization of the Romanian companies went down to EUR 17 billion by the end of January as compared to the value from the end of 2018, while the capitalization of all the companies listed on the Main Market of BVB accounted for EUR 30.6 billion at the end of the last trading session from January 2019.